Exporters ask government to provide barter deal with agri-deficit nations

Negotiations likely with Japan, EU, US, South Korea to boost India's agri exports and balance out their electronics exports into India

Exporters have urged the government to start a barter deal with agriculture-deficit countries to boost India’s exports of agricultural and allied products on a sustained basis.

Faced with restrictions imposed by many countries, India’s exports of agricultural products have declined by 19 per cent in the past four years to $32 billion in 2016-17 from $39.6 billion in 2013-14. During the same period, however, import of agricultural and allied products has jumped by 66 per cent to $24.2 billion in 2016-17 from $14.6 billion in 2013-14. Thus, India’s trade surplus of $25 billion in 2013-14 has slumped to $7.8 billion in 2016-17.

Experts also say that countries in the European Union (EU), the US, Japan, South Korea and China are dumping their products such as cars, electronic items and other valuable goods into India without committing to import products in short supply in these countries, of which India is a major producer. For, example, the EU has rejected India’s basmati rice, alleging presence of parts per million levels (ppm) of a pesticide not registered in the EU exporting a huge quantity of cars and other goods such as chocolates and olive into India.

“So, we need to start barter negotiations with agriculture-deficit countries. If India can import almond from California, the US must import horticulture, dairy and other products from us,” said Rajju Shroff, executive chairman and managing director, UPL Limited.

The Crop Care Federation of India (CCFI), the apex industry body representing manufacturers of pesticides and agrochemicals in India, has submitted a pre-Budget memorandum to the Union finance ministry, seeking immediate attention to increase the country’s agricultural exports.

“We have been appealing to the government to take measures to arrest the steady decline in India’s agricultural exports and the sharp increase in imports, which poses a double whammy for Indian farmers. While imported agricultural commodities such as apples, almonds, kiwi, grapes, wheat and even milk products have relatively easy access to Indian markets, India’s agricultural commodities face stiff non-tariff barriers in many developed countries that either refuse or restrict our agri exports,” said S Ganesan, advisor, CCFI.

India’s agricultural trade balance (in $ bn)

An innovative plan to immediately boost India’s agricultural exports is to adopt “preferential imports” of electronics, machineries, aircrafts, fuels etc. only from those countries that allow easy access to Indian agricultural commodities. Apart from that, the CCFI has highlighted the need for aggressive marketing and branding of agricultural products as is done by many countries. 

“Currently, Indian agriculture is production-centric. But, India needs to change strategy to make it market-centric,” Shroff said, adding that a signal needed to be sent to farmers about which crops they need to sow at the beginning of the sowing season. “In fact, farmers suffer low prices when the output goes up. An informed signal about the potential of crops would yield better realisation for farmers and would also help government reduce import of agricultural products. Both Australia and New Zealand have directed their farmers not to sow pulses this year on fear of low imports from India. Farmers require such indications before sowing season for crop diversion,” he said.

Meanwhile, the CCFI has urged the government to help increase export of dairy and livestock in the coming years in addition to value-added products, since primary agricultural commodities are highly perishable.